PC shipments to grow 20 percent: Gartner

NEW DELHI



MARCH 21, 2007

Worldwide PC shipments are forecast to total 255.7 million units in 2007, a

10.5 percent increase from 2006, while India shipments are set to grow by 20

percent. Worldwide PC revenue is projected to reach $213.7 billion, a 4.6

percent increase, according to the latest forecast by Gartner, Inc.

"We expect the market environment to be much the same over the near term

as it has been recently," said George Shiffler, Research Director for

Gartner Dataquest's Client Platforms Markets Group. "Emerging markets and

mobile PCs will continue to afford PC vendors their best opportunities for

growth. However, falling average selling prices (ASPs), slowing replacement

activity, and further declines in mature market desk-based PC shipments will

keep PC vendors under pressure to rationalize their operations or exit the

market."

Commenting on the India market, Diptarup Chakraborti, Principal Analyst at

Gartner India, said, "The consumer and the SMB segments will be the major

drivers of the Indian market. High demand for mobile PCs bolstered the growth,

overtaking sales in the desk-based segment. In addition, with a greater focus

given to e-governance, the government spend is expected to propel the market

further North."

Gartner analysts said worldwide PC shipments will enjoy at best a limited

boost from the release of Microsoft's new operating system (OS), Vista.

"Vista's effect on PC shipments ultimately depends on the number of

consumers and small and midsize businesses (SMBs) that find its new features

compelling enough to buy a new PC," said Mikako Kitagawa, Principal Analyst

for Gartner Dataquest's Client Computing Markets Group. "While Vista

includes a number of interesting features, these features just don't have enough

'must have' appeal with the average home and SMB user to spark a significant

rush of new PC sales."

Gartner analysts said they expect a minor increase in sales to the small

number of consumers and SMBs that put off replacing their older systems in

anticipation of Vista's release. However, the vast majority of consumers and

SMBs are expected to adopt the new OS as they gradually replace existing

machines during the next several years.

Gartner analysts also said that, while Vista's impact on PC sales will be

relatively limited, Vista uptake by consumers and SMBS that do buy new PCs will

be strong.

"Consumers and SMBs in mature markets would be hard-pressed to find a

new PC with Windows XP," said Annette Jump, Research Director for Gartner

Dataquest's Client Computing Markets Group. "This will naturally speed

Vista's adoption among consumers and SMBs. If you consider that Window Vista

Home Premium is priced higher than Windows XP Home, Microsoft could enjoy very

good results from Vista if large numbers of consumers opt for the premium

edition. PC vendors could also benefit if they are able pass this cost increase

onto consumers in the form of higher PC prices."

Vista is forecast to have virtually no impact on PC shipments to larger

businesses in 2007. And Vista adoption among large business is expected lag

behind consumers and SMBs. With large businesses, the issue is not so much a

lack of must-have features as it is the insistence of large enterprise IT

managers that the new OS be thoroughly tested and validated against established

applications before it is widely deployed. Gartner analysts expect large

businesses to delay widespread adoption of Vista until at least of middle of

next year - about the time they are expected to begin a new replacement cycle.